BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 1389
                                                                  Page  1

          Date of Hearing:   May 1, 2013

                           Susan Talamantes Eggman, Chair
             AB 1389 (Committee on Agriculture) - As Amended:  April 24,  
          SUBJECT  :  San Joaquin Valley Quality Cotton District.

           SUMMARY  :  Makes inoperative, as specified, the statutes and  
          regulations the San Joaquin Valley Quality Cotton District  
          (district), as of January 1, 2014, until specified.   
          Specifically,  this bill  :  

          1)Requires the statutes and regulations of the district to  
            become inoperative January 1, 2014, unless either of the  
            following occurs:

             a)   A resolution is approved in accordance with statutory  
               procedures of the district, as of January 1, 2013, to  
               continue operation of this chapter; or,

             b)   The Secretary of the California Department of Food and  
               Agriculture (CDFA) receives a petition from members of the  
               San Joaquin Valley cotton industry, and determines, that  
               due to industry circumstances, it is in the best interest  
               of the state and industry, that specific sections of the  
               district's statutes should be activated.  If CDFA makes  
               such a determination, they may establish a committee to  
               advise them, made up of cotton growers, handlers of whole  
               cottonseed, handlers of raw cotton fiber, and  
               representatives of cotton ginning organizations.

          2)Requires CDFA to post to their Internet Web site, if either 1)  
            a) or b) occurs.

          3)Requires specified statutes to remain operative and to be  
            administered by CDFA dealing with certified cottonseed,  
            certified cottonseed and colored cotton, and colored cotton.

          4)Permits CDFA to not administer these provisions or any  
            provisions of the district statutes, unless they determine  
            there are sufficient funds in the district account, or from  
            other sources, including the cotton industry, to pay the costs  
            incurred by CDFA.


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           EXISTING LAW  establishes the district as all counties within the  
          San Joaquin Valley where cotton is grown, creates an 11 member  
          board made up of seven cotton growers, three industry members  
          (cottonseed oil crushers, handlers of raw cotton fiber, cotton  
          ginners or their employees thereof), and one public member.   
          Statute provides authority for the board to establish specified  
          cotton quality standards; review and approve cotton varieties  
          for planting in the district; conduct tests of cotton production  
          and quality as specified, including accessing fees necessary for  
          conducting the tests; hold periodic referendums, as specified,  
          for continuation of the district; require all approved cotton  
          varieties to be labeled, as specified; and, make recommendations  
          to CDFA on all matters related to the district.  Additional  
          powers and duties are given to the board upon implementation of  
          promotion and research funding, as specified.  Provides specific  
          requirements for referendum votes for operation of the district  
          and permits referendum votes whenever the board proposes changes  
          to specified varieties quality standards; authorizes an  
          enforcement funding assessment of not more than six dollars ($6)  
          per hundredweight on cottonseed delinted for planting purposes;  
          authorizes assessments for promotion and research funding on  
          cotton growers in the district not to exceed one-half of one  
          percent of each growers gross cotton value of the previous year;  
          and, provides provisions for enforcement and violations, as  

           FISCAL EFFECT  :  Unknown.  Legislative Counsel has keyed this  
          bill fiscal.

           COMMENTS  :  California cotton was known as the King in the '60s  
          and '70s due its high quality, being of long staple lengths and  
          high tensile strength.  In 1967, the "One-Varity Cotton  
          District" was created, requiring one variety of cotton be grown  
          in the district to prevent cross contamination with other lower  
          quality varieties of cotton.  This proved to be very effective  
          until newer, better varieties of cotton were developed, and then  
          the statutes were amended to expand the permissible cotton types  
          that could be grown.

          Due to the improved higher quality cotton varieties that can now  
          be grown outside the San Joaquin Valley, reduced market prices,  
          and water shortages, the valley's planted acreage has had a  
          steady decline over the last two decades.  While the planted  
          acreage hit a high of over 1.1 million acres in the late 90s, in  


                                                                  AB 1389
                                                                  Page  3

          2013 it is estimated to be 300,000 acres, down nearly 37% from  
          last year.  This greatly reduces the concerns of cross  
          contamination of varieties, and the need for enforcement of this  
          body of law.

          Therefore, the industry, in an effort to reduce costs to its  
          producers, has requested to make the district statutes dormant,  
          while requiring limited enforcement of three specific sections  
          critical to the integrity of cotton varieties and purity.   
          Procedures are included to reactivate portions, or the entire  
          relevant statutes, as well as a caveat, in case funds are  
          depleted and CDFA can no longer cover their costs, unless an  
          alternative funding source occurs.

          CDFA estimates that it will cost roughly $50,000 to operate the  
          program annually.  The program has a reserve of approximately  
          $150,000.  It is unknown what the funding source will be after  
          the program funds are fully expended.


          California Cotton Growers and Ginners Association

          None on file.

          Analysis Prepared by  :    Jim Collin / AGRI. / (916) 319-2084